Mayfair owners take their homes off the market

Published 11th Feb 2009

The number of homes for sale worth £10m or more has dropped by a third as the downturn has discouraged owners from selling

Sales of super-prime property in central London have seized up as house prices have plunged and cash from City bonus-earners has evaporated, figures from estate agents showed yesterday.

Knight Frank, the agent, said that the number of homes for sale worth £10million or more had fallen by 34 per cent in the past 12 months as the downturn had dissuaded owners from selling.

Savills, another agent, said that transactions at the typically resilient “international billionaire” end of the market had plummeted, adding that it expected the market in prime areas including Mayfair and Knightsbridge to tumble in the absence of cash from City bonus-earners this year.

Liam Bailey, head of research at Knight Frank, said: “It appeared for some time that the super-prime sector might be immune from the credit crunch. It is now apparent that it is not immune. Prices peaked in August 2008 and have now fallen sharply.”

Savills said that the amount that flowed into the property market from bonus-earners in 2008 was an estimated £600million - 17percent of a total bonus pot of about £3.5billion.

The agent said that although it expected this figure to rise slightly to £800million of the £2.7billion pot due to be paid out in 2009, the forecast is still way down on the £3.19billion in bonuses that City workers ploughed into property in 2007 - worth almost 40 per cent of the £8.5billion in bonuses they earned that year, according to figures from the Centre for Economics and Business Research.

Prime London property has fallen 21.4percent since the peak in March 2008, says Knight Frank, and is expected to drop by 30 per cent. However, figures published yesterday showed that this news has not reached sellers.

Asking prices for prime property in central London rose for the third successive month in January by 1.2 per cent, according to Primelocation.com, the website, adding £16,106 to the price demanded for the average prime home. This was against a 7.3per cent fall in average national asking prices recorded by Rightmove last month.

Source: ' Times '

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